A legislative proposal to give restaurant and bar owners a steeper discount on liquor bought through the state store system will help offset costs associated with Allegheny County's new drink tax.

But it still may not prevent customers from driving to the next county to avoid the added tax, a local restaurateur said yesterday.

"It's clearly going in the right direction. If we can get all the parties to sit down and talk, I think we can work out the logistics," said Glenn Hawley, who owns Monterey Bay Fish Grotto in Mount Washington.

Just before Christmas, state Sen. Sean Logan, D-Monroeville, and Sen. John Rafferty, R-Montgomery, introduced a bill that would increase from 10 percent to 16 percent the discount for liquor licenses when owners purchase alcohol through state stores.

With the Pennsylvania Liquor Control Board realizing nearly a half-billion dollars in revenue last year, "it is only appropriate to pass these record profits on to our small businesses across the commonwealth," said Mr. Rafferty in a news release.

"This is a great way to help our small businesses in Pennsylvania," added Mr. Logan.

In a statement yesterday, Patrick J. Stapleton, chairman of the liquor control board, noted that any increase in the discount will reduce the amount of money available to the commonwealth from PLCB operations.

"But the PLCB is committed to the success of its valued licensees," Mr. Stapleton added. "We look forward to working with lawmakers to craft a solution that is in the best interest of all parties."

Mr. Hawley said local restaurant and bar owners have long lobbied the state to either increase the discount or exempt them from the 18 percent tax enacted to help Johnstown recover from the 1936 flood. Instead, those businesses in Allegheny County will be adding 10 percent to their drink prices after Jan. 1 to cover funding for the Port Authority transit system.

The new tax has added costs for restaurant and bar owners, too, especially if they rely on customers who use credit cards, Mr. Hawley said. Not only do owners face additional costs from changing menus and reprogramming cash registers, they will pay more without bringing in more revenue because credit card companies charge businesses based on the total bill, including the tax.

"By us being in a for-profit, state-owned monopoly on alcohol, it would make sense for the state to reduce our cost of purchasing goods at the same time they're taxing the end user," said Mr. Hawley. "That would give us the opportunity to lower our costs and not pass 100 percent of the drink tax to the guest so we can remain competitive."

If the bill is passed, the hospitality and tourism industry would see close to a $20 million savings, say the bill's authors. Mr. Logan and Mr. Rafferty chair the Senate Law and Justice Committee, which oversees the state's alcohol industry.

"Sen. Rafferty and I will be working hard to see that this savings for the hospitality and tourism industry is a part of next year's budget discussions," said Mr. Logan.